Becoming self-employed

Being self-employed early on in your career isn’t for everyone, but with the right planning and attitude you can make it work. Here’s our guide to going freelance.

I'll just finish checking Twitter...then I'll get dressed...then maybe I'll start work.

What is self-employment?

Self-employment comes in different forms – this article is about being freelance. We talk about setting up your own business or starting a social enterprise in other articles.

I’m young – should I go freelance?

Yes!

When you’re young, you’re more flexible and generally have less responsibility – a great time to be freelance.

Many young freelancers work in the creative industries – journalism, copywriting and graphic design. This is partly because getting long-term paid work is tough.

No…

Career development and training can be hard to get as a freelance – unless you’re willing to pay for it yourself. Plus, you’re bossless. Before you dash down the road twirling round lampposts and yelling ‘I’m freeeee! Free of The Man!’ remember a good boss can teach you a lot.

Am I ready to become self-employed?

To become a freelancer you need:

• A skill that others are willing to pay you for
• The confidence to pitch for work and the ability to convince clients you’ll do a good job
• Contacts – and preferably the offer of some freelance work already
• A space to work (even if it’s just a desk at the end of your bed)
• Evidence there’s actually work available. Do you know other self employed people in your sector? Are they doing OK, or spending their days tweeting from the local soup kitchen?

Can I afford to go freelance?

If you’re thinking of moving from safe employment to being the lone ranger, get a gauge on your living costs: rent, food, paying someone to come and fix your computer when the hard drive dies and takes a client’s work with it. Work out what your day rate’s going to be – the professional body for your industry should give you an idea of what you can charge. Make sure the sums add up.

Next, check your reserves. You need a margin to fall back on if times get tough. Just a month’s rent saved for the day when a regular job you relied on comes to an end and you need to find more work.

What about tax?

Self-employed people still have to pay tax – set aside around 25% of your earnings each year – and Class 2 National Insurance contributions, as well as Class 4 National Insurance contributions if you earn over the basic tax limit.

As soon as you start freelancing you should call the HMRC and declare yourself. You’ll have to file a tax return each year regardless of whether you earn over the basic tax limit or not (the penalty for forgetting to do this is £100).

Next, it’s time to employ the services of an accountant to help you fill in your tax return every year. You can do it yourself, but this is only recommended if you’ve got a Maths degree and a phD in deciphering government forms.

Have I got the right personality?

Self-employed people have to be tough, tenacious and able to deal with rejection. It’s OK to cry a bit and relentlessly internet-stalk the client who just turned you down. As long as the next day you go back to them with another idea. Better still, sell the idea they turned down to a bitter rival.

Ask yourself how well you cope with uncertainty. It’s quite likely you’ll wake up sometimes and have no work – otherwise known as unemployed. Nine times out of 10 you’ll turn it around, but being your own boss means getting more work comes down to one person – you.

Do you need interaction with other living breathing humans each day? Freelancing often means working from home for long stints. If you find yourself dragging confused Jehovas Witnesses off the doorstep for a cup of tea, chances are you need to get some shift work.

Getting sick when you’re self-employed

If you get ill a lot, freelancing could the wrong choice. Letting clients down is bad for business. Freelancers don’t get sick pay either (though you can get Employment and Support Allowance if you’re unable to work for a long time.)

But freelancing could suit you if you have mental health issues that make going in to work every day hard. And being able to work when you feel like it can be liberating, particularly if you suffer from insomnia.

Work often comes in giant waves with dry patches in between, so you need stamina and the ability to pull all-nighters when needs be.

Once I’ve gone freelance, can I get a ‘proper job’ ever again?

Employers actually like freelancers. Working for lots of different organisations gives you a healthy CV and a strong portfolio. It’s also proof you’re good at pitching, making contacts and managing your own time.

Plus, you don’t have to chuck aside the safety net completely. Many people become slashies – actress/waitress, swimming instructor/DJ, writer/office manager. Also known as developing a portfolio career, you can be contracted a few days a week and gradually develop your freelance career round the outside.

Photo of boy in dressing gown by Shutterstock